Why sell permanent Insurance?

[James]

We still get paid far less and arguably have to do a lot more work. Average health commish is 20% and average premium is $3,500. That's a $700 commish. Compare that to a $3,500 life premium at 90% and the commish is $3,150.

But for $3,150 there's nothing to service. For $700 there's a lot to service. Even figuring in the renewal at 5% that's only an extra $175. Still doesn't come close to life commissions.

I would disagree with this conclusion, did I need to say that?

 

[Crabcake Johnny]

You would disagree with the fact that I can sell a term life policy and make MORE than selling a health insurance policy? My term policy is $105 a month. My commish on it was $1,134. My health policy was $3,120 and commish was $780.

With health I need to run network searches for doctors. Their doctor's not in network? No deal. I need to make sure their medications and conditions are covered. No coverage for pre-ex conditions? Almost zero chance of a deal.

Then I need to babysit them through the next year as they all run off to the doctor, ER and hospital. At any time the client runs into a bill they didn't expect then I can expect a lapse.

Then it's renewal time and I have to go over all their options all over again.

And you want to compare that to me cranking out a term policy, making a $1,000 on it and having zero customer service, doesn't matter what doctors they see and I don't have to worry about coverage for pre-ex conditions? Please. If I put the exact same amount of effort into selling life that I do with health I'd triple my pay. I'm simply not into life like I am health. Wish I was - I'd be making at least $500,000 a year.

Safe to say that the richest insurance agents in the country are life insurance agents. Knock out 3 perm policies a week and you're making well over $200,000 a year.

 

[James]

In my expierence when I'm out selling term policies the average is around 250 grand and if they are around 40 more than likely we are not looking at high premiums. In fact for 20 yrs its around $350 and 30yrs around $500 making my 100% commission on average around those exact amounts. Now if I sell the same guy a solid Health contract thru Assurant I would make about the same if he has a wife and/or kids I would make more. More than likely though I'll sell a ten year policy with the plan being to move it to a permement plan in the next year or two bringing the premium down to around $200-$250. The real payoff comes along with Reviews and building of a relationship and a (you'll love this!) plan! Plus most succesful life agents find a good year is covering 100 lives (we are talking Permement coverage), and that would likely get you in the Round Table of any captive company.

 

[Crabcake Johnny]

The only thing I can see is marketing purely for life insurance seems harder than health? I've never marketed for life so I'm guessing. I can market health simply by calling small business owners who are very receptive. I don't imagine I could call those same owners about life and get the same level of response.

I may very well be wrong since there seems to be a hell of a lot more life insurance agents making fantastic money.

I will say this - a good life agent is very hard to find. I think most life agents are newbies that get sucked into this biz by captive life companies. I can see a larger market for life insurance since probably 95 out of very 100 people have the incorrect amount of life or wrong type of policy. It would seem like a feeding frenzy.

But I cannot seem to explain the lack of interest in life when I try to cross-sell my health clients. They admittedly don't have the correct DB, convey interest in quotes, then they fade away.

I would like VERY much to improve my life cross-sells with existing health clients but I can't seem to find a way to build any sense of urgency. The main problem is they usually either have cheap crappy 10 year term or cheap perm with a very low DB and any way I slice it I'm raising their payment. Probably - hence the lack of interest.

Case in point is a client I have who's intersted. He got sold a UL policy with a $100,000 DB. Great - he needs at least $500,000. But his life agent trashed the crap out of term - called it thowing his money is the toilet. Ok - fine. But what's his wife do with $100,00 when just the mortgage pay-off is over $200,00? And he's the sole income producer - the wife's home with two kids. But he's balking at the payment to raise his DB to $500,000 for his UL policy. And that's the crap I run ito constantly.

 

[James]

Marketing and prospecting for life is IMHO much harder and expensive than health is, as you noted. Yet though with all my expense of staying in front of people and marketing my newsletter this is what it boils down to many times. The "Moment" as I tell it when a person understands that immortality is not reality, usually between the age of 35-45 one may get a signal from ones body. I had a moment while driving between San Antonio and El Paso, guess what, not much there on I-10. Luckily for me it wasn't nothing serious came and went and likely just indigestion but for a moment I thought I was having a heart attack or something and that was years ago. Tell ya though, got home some days later and informed the wife we probably need to get more life insurance.

Yet though the Life Insurance Review is where it's at in selling life insurance to the individual market. So is keeping in front of and using that review to remind them that they need the "Plan" that was develope from the review to be implemented. Just getting the appointment for a full review is hard enough but than you have to translate that to paper and ink which the initial apt. is only the starting point even if you get a small term policy. Then sometimes you get lucky and they know what they want and you can implement right away but that is not the norm.

Now I have heard some here make fun of the 5-Way, but in prospecting businesses for life insurance I don't know a better opener to get to the all important first apointment.

Outside of DB amounts needed, now that is relative amount. I have seen no good way of determining that amount without doing a review and understanding the mentality of the people you are prospecting too.

 

[Crabcake Johnny]

Well, you posted before that you send out your newletter to 10,000 people in a 20 mile radius. Heck, just the postage costs you $4,000 and that's not including the cost of the newsletter. You're over $5,000 per mailing - which is quite expensive. You mail out one per month that's over $1,000 a week just in sending the newletter. Definitely something most people can't afford to do.

 

[James]

Well, you posted before that you send out your newletter to 10,000 people in a 20 mile radius. Heck, just the postage costs you $4,000 and that's not including the cost of the newsletter. You're over $5,000 per mailing - which is quite expensive. You mail out one per month that's over $1,000 a week just in sending the newletter. Definitely something most people can't afford to do.

The Newsletter is quarterly plus I have two other people that participate which brought the numbers so high when I included their mailing list.

The next release will be March and I'll start printing in Feb if I do the printing. Hopefully I can bring on new people, in discussions with several now, hold my breath and hope for the best!

 

[James]

The best mailer I ever used for Life Insurance in pure numbers is the letter that has nothing but basically rates for ten, twenty year term! Choose the company of your choice get their rates, I use Standard others I know use Preferred which is to me a bit of a bait and switch but some say using standard rates nowadays could be technically the same.

Simply title the page "Paying too much for your Life Insurance?", or something like that. On the bottom simply place your contact info along with a replier. Wait a few days and start calling if your list is scrub with the DNC if not relax and wait till they send the replier back or call (don't hold your breath for calls though) and if you are internet savvy type of seller include your website. Now don't place no insurance company name on it but, I'm sure everyone knows that. Add no more than a short paragraph of text. Thinking of trying this with Health and giving a link to my Assurant Site.

 

[Crabcake Johnny]

I've personally had piss poor results with mailers. For me, when I used to do them, the response was around .05% (half of 1%)

Well....that's easy math:

40 cents X 5,000 mailers = $2,000
.05% return = 25 leads
Close 3 deals at $800 commish = $2,400
$400 profit.
That's $80 a lead. A 1% return would still be $40 a lead.

The question is this: Would anyone pay $40 to $80 for an unqualified lead?

As we can see, the mailers didn't work. Even at 1% return the profit is still too low.

 

[James]

I've personally had piss poor results with mailers. For me, when I used to do them, the response was around .05% (half of 1%)

Well....that's easy math:

40 cents X 5,000 mailers = $2,000
.05% return = 25 leads
Close 3 deals at $800 commish = $2,400
$400 profit.
That's $80 a lead. A 1% return would still be $40 a lead.

The question is this: Would anyone pay $40 to $80 for an unqualified lead?

As we can see, the mailers didn't work. Even at 1% return the profit is still too low.

Personally I think if you use 1/3 the list and mail the same people three times you would increase your leads. Then it depends on what you was selling? If it was life I would think a better closing ratio could be achieved but really don't know what product you are referring to, I'm thinking it might of been a health mailer? If so I'm not going to suggest I could get a better closing ratio. I would also look to improve your mailer, by testing differing type of mailers to a smaller group before sending out bulk.